Odisha amends OPDR norms to improve credit recovery

Acting on the banks' demand, the state government has brought all the subsidy and interest subvention linked schemes implemented in the state under the Odisha Public Demands Recovery Act, 1962, with an aim to improve the recovery position in this credit portfolio.

The state government has issued a notification in this regard. The notification has appended subsidy and interest subvention linked schemes implemented by various government departments to the list of credits termed as state sponsored schemes. Earlier, only the schemes requiring composite loan sponsored by DIC were covered under the Act.

The banks had been demanding for the amendment of the Act at the state level bankers committee (SLBC) meetings time and again. The government sponsored schemes like Swarnajayanti Gram Swarojgar Yojana (SGSY), Swarna Jayanti Shahari Rozgar Yojana (SJSRY), which were not sponsored by DIC, did not come under the state sponsored schemes. As a result, the certificate officers were unwilling to take any action against the loan defaulters under the OPDR Act.

"We welcome the decision of the state government in changing the OPDR Act that will improve the recovery performance. It will also ensure good outflow of credit to the sectors where it is required," said Dinesh Kumar, zonal head, Allahabad Bank, Bhubaneswar.

The banks were also opposing the mandate issued by the state revenue and disaster management department in 2007, which asked the banks to pay 50 per cent court fee upfront at the time of filing cases under OPDR Act, while the balance amount was to be adjusted from the certificate debtor and deposited with the government. The banks are of the opinion that the recovery procedures under Act should be amended in tune with similar acts in Uttar Pradesh, Madhya Pradesh, Rajasthan and other states to improve the recovery performance under different government sponsored schemes. "The state government is yet to take a call on this demand," said an official.

Under the OPDR Act, 12,391 cases involving recovery of Rs 124.82 crore are pending for disposal as on December 31, 2014. The SLBC report read that the banks are unable to recycle the funds owing to non-recovery of loans, mounting overdue and rising NPA (non-performing assets) percentage. The NPA per cent of the state stood at whopping 8.78 per cent and the overdue is at 51.91 per cent as on December, 2014, according to the report.